Yesterday, NRO asked longtime conservative former Congressman Vin Weber how he would have voted on the bailout. To explain why he would have voted in favor, he proposed a thought experiment for small government conservatives: “Imagine, just to play a mind game, if Herbert Hoover had engineered an intervention that had prevented the stock market collapse from turning into a full-scale depression. The whole course of history might have changed in a direction far more to the liking of conservatives.”
In other words, if one little financial intervention could have prevented the New Deal and preserved something like the Harding-Coolidge-Hoover-era size of government, wouldn’t it have been worth doing? I understand this sentiment, but think it relies on a misreading. Hoover actually undertook unprecedented economic interventions in response to the Great Depression, including public works spending, efforts to guide wages and prices, policies intended to benefit labor unions, and especially higher taxes and tariffs. Hoover was in some ways a precursor to the New Deal, not the last gasp of laissez-faire economics from which FDR was a radical departure.
But today we remember Hoover as an anti-government ideologue and FDR’s New Deal as our economic savior, ushering in a new era of big government that the conservative movement has never really been able to undo. Already, we hear that compassionate conservative George W. Bush, despite his big spending and this $700 billion bailout package, is an anti-government ideologue too. If the bailout is passed and fails, it will actually be used to justify even greater economic interventions — and cited as evidence of the failure of anti-government Bush.